What Does The Recent Uptrend In Blockchain Patents Mean For A Decentralized Future?

And here it is. The real indication that the future will be underpinned by blockchain. Here comes the patent cavalcade, with big guns like IBM and Mastercard both applying to patent over 100 different blockchain-related inventions. But is this rush to patent an inherently decentralized technology a step towards a future where decentralization is the norm? And doesn’t patenting go against the very notion of decentralization?

To investigate further we need to take a deep dive; both into the history of patent booms and their associated ongoing effects, as well as take a look into the uptrend into the notion of decentralization itself.

Patenting:

An individual or organisation laying claim to the intellectual property of an invention that is new, useful, and non-obvious. This could be a new business method, input device for your laptop, or, in the case of blockchain, innovative software.

Decentralized networks:

A collection of nodes interoperating without the assistance of an orchestration node, via whole or partial group consensus among the node peers.

Decentralization:

Distribution of power and/or function, lacking central authority.

A stroll down memory lane: Patent booms and ongoing effects

To theorize whether the current uptrend in blockchain patents may turn out to be just be a blip, it’s good practice to have a look at some past patent booms to see how those particular areas of interest have grown since they started heavily trending.

DNA patenting

Boom: Anyone remember the late 90’s / early 00’s rush on DNA patenting? While natural genes have now been ruled to be unpatentable, “tweaked” genetic sequencing is still on the table.

Then: Dolly the sheep cloned.

2018: We’re buying our family personal DNA analysis for Christmas, which can tell us how to lose weight according to our genetic fingerprint. The explosion in personal DNA testing has lead to interesting ongoing effects, such as identifying suspects in cold cases through familial DNA testing, via open (and sometimes closed) genetic databases.

Future: The future points to possible tailoring of gene therapy, healthcare, and insurance from DNA fingerprinting.

Artificial Intelligence

Boom: In the field of AI, patents really started to take off in around 2012, with around 140% increase in patents granted worldwide in 2013 as compared to the year before. By the end of 2016, this figure was almost quadruple 2012’s numbers, according to the World Economic Forum’s Artificial Intelligence Collides with Patent Law whitepaper.

Then: Watson computer built over 5 years beats contestants on Jeopardy.

Blockchain patents: The hard facts

Prior to 2015, if you were investigating blockchain patents, you’d wind up going nowhere fast. It wasn’t until then that the first patents for blockchain technologies started getting filed. And then the blockchain patent explosion started.

(Methods — English Title: blockchain NOT cryptocurrency NOT crypto NOT coin, English Text: NOT belt, Application Date: year)

Who’s filing blockchain patents?

The first companies to lodge applications in 2015 included British Telecom, IBM, Bank of America, Mastercard and the Toronto Dominion Bank.

In 2016, this list expanded to include NASDAQ, Intel, Accenture, Chinese technology companies such as Beijing Tiande Technology and ZTE, along with various government research organisations.

In 2017, Microsoft, Alibaba, Tencent, Wells Fargo, Sony, Visa and General Electric got in on the action.

Interestingly, of the filings in 2017 (under the WIPO database), 109 were filed under Chinese jurisdiction (and an extra 12 by Chinese inventors under WIPO). 144 were US filings (48 US inventors under WIPO).

Big tech houses and banks have been mainstay applicants across the space of these brief few years, but it’s the interest of others like Alibaba, Tencent, and Sony that shows that the blockchain technology is starting to pick up speed outside of a niche tech/financial audience.

Decentralized technologies: A closer look at P2P

If you look at computing in general, you can instantly identify the trend towards decentralized systems. P2P networking systems became popularized in 1999 with the launch of Napster, the music-sharing software that operated by sharing databases across client machines, without the need for any central repository of files. However decentralized computing was built into the architecture of ARPANET; it simply got pushed to the side in favor of the client-server model.

This late-90s boom in decentralized systems was thwarted as the products front and center of the boom mainly dabbled in illegal activities — it tainted the name of P2P as an enabling technology. Joshua Kenty, developer of Open Stack believes it set business use of P2P back 10 years.

Sound familiar?

Bitcoin (and by association, crypto and blockchain tech) was a dirty word for many years except with the most tech-forward people, linked towards seedy drug deals on the deep web. But it wasn’t (presumably) created for that purpose. It’s been almost 10 years since the launch of Bitcoin — and now we are seeing flying sparks from industry jumping on to blockchain as an enabling technology.

Patent applications in P2P technologies reached a peak in 2009, 10 years after the release of Napster. The applicants? Companies like Tencent, Huawei, ZTE, and Samsung.

The term P2P has even been adopted beyond the scope of this networking technology. AirBnb and Uber built their names on being peer to peer marketplaces, a place where buyers and sellers can freely trade without an intermediary (although, the company and software behind them do assume this role).

Blockchain goes beyond P2P to provide trust in transactions, transactions that can’t be guaranteed in regular transactional P2P — at least without an overseeing function. In essence, blockchain is P2P 2.0 (or 3.0…).

Decentralization beyond technology

When we talk about decentralization, it’s often not only about a way of arranging technology to provide a benefit. We can also talk about decentralization in politics and societal systems.

“Decentralization” was originally coined hundreds of years ago as a term to describe a different system of government, with distribution of powers and functions, away from a large, overseeing body.

With this in mind, Is there a trend towards decentralization overall? Signs point to yes.

Distrust in traditional, hierarchical systems is high: According to the Edelman Barometer 2018, 59% of respondents globally said “I am not sure what is true and what is not”, 56% reported “I do not know which politicians to trust”, and 42% said “I don’t know which companies or brands to trust”

Burning Man, one of the world’s biggest festivals built from decentralized community effort and societal non-conformism, consistently sells out in minutes

Don’t patents steer away from the notion of decentralization?

Since blockchain is inherently decentralized, and decentralized systems inherently distribute power (or function), you might ask — how do patents fit into the picture? A patent is, by nature, owned by an organisation, body, or individual. It’s about hoarding of power…

But it’s likely a knee jerk reaction.

There’s a huge threat of power being taken away from these large companies that have gotten used to the wealth generated by their control of systems; control of systems like banking, telecommunications, and big data.

If you think about the Chinese patent interest, and their controlled internet and technology policies, you’ll see clear links between the two.

Whether these blockchain patents will stand up to the test of decentralization, or become useless by-products in the system remains to be seen.

We’re trending towards a distributed future

Do these sorts of conversations around a more distributed future keep coming up in your personal conversations, in meetings, when networking? Because they certainly do for me.

We’re at a pivotal point in time, a time where gains in technology are influencing societal structure. While governments and businesses try to clamour for their slice of the web, data control, and blockchain tech, we see a dissatisfaction and distrust among the public of these institutions.

The Solid project, lead by internet pioneer Time Berners Lee, is one such decentralized tech solution that seeks to give power back to the people.

With Kingsland, we want to educate and empower industry and developers to take the blockchain ball and run with it. It’s up to you how you use it — and where you’re interested in taking the notion of decentralization.

Want to know more about the business of blockchain? Join us at our Executive Education Fasttrack course on January 15 & 16, 2019 — part of Miami Blockchain Week. Register for the course today!